tv Bloomberg West Bloomberg February 4, 2016 6:00pm-7:01pm EST
condoleezza rice classified information and personal e-mail accounts. the inspector general says 12 e-mails contained classified national security data. congress was eager to hear from martin shkreli about the severe -- for a drug sold by his company. the former pharmaceutical executive exercised his fifth amendment right. he faces criminal charges of securities fraud. e-mail show officials were aware in legionnaires disease linked to flinch what appeared rick snyder says he learned of this fight just days before sharing information with the public but e-mail show that his office knew of the outbreak last march. the number of islamic state fighters is falling in iraq and syria but rising in libya. a defense official says there are 20,000 fighters in iraq and syria, compared to an earlier estimate of 30,000. military officials say coalition airstrikes are taking a toll on islamic state. global news 24 hours a day.
ur 2400 journalists and more than 150 news bureaus from around the world. from bloomberg headquarters in new york, on mark crumpton -- i'm mark crumpton. emily: i'm emily chang and this is "bloomberg west.:" a bloodbath. as then shares down 30% company turns and a weak report. we take a look at why investors are rushing for the exit. more changes afoot as -- at sumner redstone's empire. what is next for cbs and viacomm as the companies embark on a new era. continues its spread, arising in the u.s. and spain. could genetic engineering be the answer? first to our lead.
plunging inres after-hours trading as much as 30% on weaker than expected guidance for 2016. revenue in the current period will be $820 million, falling short of estimates by $47 million. revenue in the fourth quarter climbed 34%. the company reported net loss of $47 million, down 6000% year-over-year. he with me to break it down is our bloomberg intelligence analyst in san francisco. david kirkpatrick and new york. and our editor at large, cory johnson in new york as well. great to be here. all of us here. in one place together. cory, break it down. assisted just because of the forecast? -- is this just about the forecast? cory: it is about the forecast for this is supposed to be a growth stock. across of a lot of important metrics. you saw growth but a meaningful deceleration of that growth. emily: lincoln gets compared to
facebook. the business models are completely different. but when it comes to user growth, linkedin is not showing much. >> still, their projection shows they are going to have 47 million less in revenue and they lost 7 billion and market cap. i think frankly this is still one of the great companies of the digital age. that has a position unmatched by anybody in high network, professional people globally. it is the only network for business people everywhere. i think it has got stable management, fantastic opportunities for more profit. i think it is overdone. emily: the talent -- recruiters is defined good job candidates is unrivaled. cory: i would agree. it is a company that is doing well but it is it a question of canada chief of valuation? that i -- can it achieve a valuation? user growth pickup in the last quarter. up to 414 million which is a
nice, big number. that is a lot bigger both in twitter's entire audience and growing a lot in terms of adding those users. but i think that it is a pace to that growth. it is really interesting to hear them talk about global economic slowdown. in markets outside the u.s., they talk about having a real head in terms of business slowing down. i think it is interesting because we are starting to fear that from tech companies, not just from oil and gas companies. tech companies, like google and linkedin, see slowing growth internationally. emily: this is the only u.s. social network that has found a way to break into china, albeit slowly but surely through a joint venture. we have been listening to jeff weiner on the call. take a listen to what jeff had to say. jeff: as we look towards 2016, you can expect to see linkedin content more deeply integrated into the core experiment as well as deeper integration across our premium products. we also see a great opportunity this year to leverage our go to
market strategy to continue to deliver content into the enterprise. francisco, would you agree that there is a mismatch here between the strength of the business and a perception of the strength of the business? you competitive facebook earlier. if you look at the new guidance, 2016 expectations are facebook is growing much faster and linkedin trades higher than facebook. this is a growth expectation stock. couple of the reasons is phaseout #and solutions businesses. there are online sales that is happening. in the core talent solutions. they are focusing on narrower product. so execution is going to be key. what this is doing right now is shattering the confidence in their ability to match those high growth expectations. think about twitter's valuation not long ago was a lot higher than what linkedin is now. emily: not anymore.
half. now it's about this is a great company. you look at the long, which is the way i look at the world he there no other truly global social network other than facebook besides lincoln. that is a very big deal. -- besides linked in. emily: whe is a user growth going to come from? the global economy is going to be greater. africa, latin america, asia . that is where their opportunity --cory: they changed their products quite a bit over the course of this year. they talked about that in the conference call, changing their mobile app. there was a suggestion of reporting on a new category going forward. so, they are changing the fanbelt while the engine runs. emily: they have been changing the mobile app. mobile traffic has been a 50%. the was concern that some of these changes would lead to short-term hiccups. is it an app i'm going to every
single day? cory: they talked about it in the conference call. they wanted to make it an app that sales people go to every day. they want to create tools to use this app every single day. integrating with calendars. go to meeting, the names of the people and their linked in bios will come up. that is their goal is daily use. emily: maybe salespeople are going to it every day. is that enough? >> if they are expecting that core focus on mobile, they have that diversified mobile app strategy that will roll out this year in terms of what the atoption rate is and how th improves engagement. like i said, execution -- the near term is to keep focus. long-term, the fundamentals from how big the market is and what linkedin's positioning is, still continues to be strong. it is the ability to gauge how quickly of they can grow in the near-term as quickly as they
expect them to. david: to puncture my own pollyanna approach, in some ways they really do have a problem. it's an app you use in frequently. they have tried hard with a media strategy. dan roth has done a great job putting media in there. emily: the content strategy that's driving advertising, right? david: the reality is it is still a service you use very intimately, and that is a weakness. on the other hand, my own little company, all of our best employees we have gotten from advertising on linkedin. it is the de facto best place to get employees if you are small business. i think that is a partial strike to say. emily: david kirkpatrick techonomy ceo with me for the hour. cory johnson. time to say goodbye to you. for joining us. shares fluctuated with the other major averages.
julie hyman has the details on the session. was a lackluster session in terms of decisiveness on the part of market dispense. we had major averages fluctuate in a very known range. - narrow range. the nasdaq did manage to eke out a gain by the end of the day. the nasdaq 100 of the largest caps of stocks on the nasdaq did not manage to eke out that same gain. there were a number of different reports for investors to consider from jobless claims rise into productivity falling by the most in almost two years. that affected a trading as well. but if you looked at big cap tech, there was a split over the day. within the nasdaq 100, the stocks that were both contributing and weighing on the average the most were google and facebook on the downside and amazon and cisco on the upside. yahoo shares rebounded after
citigroup upgraded though shares to a buy. basically for the reason that the company told us about a couple days ago -- that it was potentially putting itself up for sale or at least considering a very strategic option. finally, nxp semiconductors, though shares also a standout after the company forecast quarterly revenue to rise as much as 55% after takeover of -- semi conductor is complete. back to you. emily: julie hyman. now to someone with a true earnings hangover ,nick woodman, the founder of go pro has lost his billionaire status. it has fallen to $770 million. gopro shares 2014, have tanked off slowing sales. he was the highest-paid executive in the u.s. back in 8714, raking in over $27
warner and bright house. charter awaiting military rising,e and faces titian from online streaming services. it is a changing of the guard at viacom. executives just named chairman of the entertainment company after sumner redstone resigned from the position. this marks an end to redstone's reign over the media company he has control for almost 30 years. redstone a day after resigned as chairman of ceo. it was met with some resistance. he lacks the support of sherry redstone. for more, i want to bring in bloomberg news, chris paul mary in l.a., tracking sumner redstone screw. also with us is the executive vice president of screen media ventures. david, i will start with you. what do you make of his departure and what will his legacy be ? david: it was time for him to
go. he is certainly old and he was getting long in the tooth. his legacy -- he built this conglomerate which was an amazing machine during the basic cable heyday in putting together cbs and paramount. a builderia baron, in the truest sense of the word in the media landscape. knows, cbs,yone's nos viacom have not done very well over the last couple years. cbs is number one in viewers. les moonves got promoted. the cable properties have not fared so well. they needed a change. emily: that question is, what changes at cbs and viacom as a result? david: i do not think much. that is what shari redstone to because shedaumann, wanted somebody new. he is the same old same old.
it will be very interesting how long will he last? i don't know. that is what her point of view was she did not want to be herself and she did not want to be him. >> one of the things that strikes me about viacom, a national comparison is time warner and hbo. great contentt a company, but it is an amazing technology company. they put enormous resources into their digital product, hbo go, especially,. they have engineers working on that, and proving that all the time. havenot think viacom anything comparable. that is the kind of thing we need to see from the. emilym. emily: how is this been rippling throughout hollywood? chris: it is definitely the talk of the town. this is almost the best show that viacom's produced in a while. [laughter] ris: people are really going to miss. this is one of the reasons why sumner made the decision to step down and chairman -- as chairman
because he was becoming too much of a distraction for management -- and investors were saying, who is really in charge here? now he's let everyone know it is not him. as.y: les moonves clearly we did have les moonves on bloomberg a couple months ago. take a listen to what he had to say. primarily a broadcasting company, and they are a basic cable company. the value in having us to together no longer make sense. so, i think both companies are better off going there separate paths. emily: are they really better off? >> what is the value of being separate? i'm trying to figure that out myself. the basic cable cubbies have not fared well on their own. cbs has done very well with new programming that they have not had a new hit. their shows are getting long in the tooth. they need to do some changing. i'm trying to figure out what do they benefit by separating? i don't know if it is better to stay together or not, but what is the benefit of separating? emily: how much of this is
disruption in -- when it comes to netflix and better original content -- new distribution platforms? >> everything is changing dramatically. the problem is with tv now, none of the basic cable spike comedy central, vod viewing. has got to change the way they do things. so does cbs. nobody really knows the answer. everyone is competing with netflix. you brought up the best point -- hbo was in the game way before netflix. allbo is the true leader of this pack, and everybody else is falling what they have done. cbs has tried to go into an s-vod site. they have their core viewers were going to watch cbs, without commercials but that have they expanded their base? i don't think so. >> the universe of competitors has grown so much for it all these networks you never thought
of, and they are putting out products that people are accessed with. emily: we'll have to leave it there. thank you for joining us. chris palmeri with us from l.a. david for patrick is sticking with me to it coming up, the rampant spread of the zika virus hits a new milestone. we explain why researchers are focusing on genetics rather then insecticides to fight the disease. ♪
emily: a story we are watching. spain has confirmed europe's first case of zika virus in a pregnant woman. a milestone in the disease's rapid spread around the world. any u.s., new york is reporting 11 positive cases among residents. and florida reporting nine cases earlier this week. all of these cases have been spread by people traveling from other countries. but nowhere is the virus more rampant and latin america. remember there is no vaccine or ofe for zika and decades
efforts to rat -- eradicate mosquito borne diseases with insecticides have failed to researchers are turning to altering the dna of mosquitoes and such a way that would suppress the disease or what about the species entirely. our number view columnist faith has just written about this and joins us from boston to explain. david kilpatrick is with me as well. explain how this would work? how a genetically engineered mosquito could wipe out an entire population of another kind of mosquito? clear whethernot you could actually wipe out a whole population, but there are a lot of really interesting new technologies that are coming online. there something that goes way beyond ordinary genetic engineering, called gene drive. and that is something where there has been a lot of progress in the last few months. and the idea is that you cannot only change the genes of an
animal but you can change them in a way that breaks the rules of ordinary genetics, so it can spread to a population very fast. david: isn't it true we have just made a lot of progress recently and what we can do with genetic engineering and that we're faced with some amazing new opportunities in general, which this is a good example of? faye: i think so. one of the big breakthroughs has been something that's referred to sometimes as crisper, gene editing, a more precise way of changing the dna of plants or animals. and people have been combining that with this gene drive technology and experimenting.in the lab they have been able to take an artificial genome and spread it through a whole population of fruit flies and also made progress in mosquitoes. a lot of that research has been aimed at trying to make
mosquitoes resistant to malaria. emily: so, what are the biggest obstacles here? is it legal, ethical issues, is a logistics? faye: it's all of the above, but i think one of the biggest obstacles that the scientists are going to face is going to be gaining the public trust, because they have had enough problems with doing genetic engineering in domestic plants and animals. here they are talking about changing the genetics of a wild animal, part of the ecosystem, which is something profoundly new. an animal that we do not like buy, but we do not know all of the long-term consequences. i think we are already seeing some conspiracy theories floating around about some of the earlier field trials and more traditional genetic engineering to try to combat thie zika mosquitoes. david: is that with a worried
about the react against, if we start altering eco-stint -- altering ecosystem, it could cause other problems we cannot predict? faye: that is exactly it. you're making a change in an ecosystem. you do not know what other, what animals might attend on those mosquitoes for food. and just an unanticipated consequence of doing something like this. carryingse of the zika mosquitoes, scientists say they actually do not belong in the americas. they are an invasive species, they hitchhiked with humans. they are originally from africa and not native to this content or to south america. emily: so, quickly, there are conspiracy theories that the british biotech firm is leading the charge on this, contributed to the spread of the virus. quickly, what do you think of that? faye: that is very interesting. i mentioned that in my column because i think it is something
the scientists have to be mindful of. they are worried about keeping the public trust. this conspiracy theory shows how fragile that trust can be. the biritish company is actually not doing gene drive. they are experimenting just with altering the genes of a few mosquitoes and hoping a mate and the the gene on to cull population. it shows how paranoid people can be about any genetic modification. emily: certain a fascinating. columnisterg view joining us from boston. they do so much. we will talk cyber security when we come back. ♪
with us to discuss is jose altuve as who joins us from tokyo. key are searching for a night in shining armor. a few details have come forward as of late. what is the latest? saga dates 2012, when they made their initial offer. ago, it was aeks free much done deal, the bid from state of japan. now, foxconn can potentially be the winner. yesterday, they did not say which way they are leading,. , but it is clear that foxconn has gained ground. emily: the offer has doubled. clear decision to
me. we are hearing that they are traveling to tokyo today to potentially raise and possibly even offer a deposit. the deal is a lot more complex. as asts have described it rude goldberg contraption. sharp would be split off into various companies and merge with other struggling industries. the lcds would probably to point -- what probably join japan display. this has drawn attention as a litmus test, the willingness of the japanese economy to open up. what is the showing so far, business as usual? pavel: japan's image of a government that perhaps pops up
props up zombies -- corporate zombies goes back to the 1990's. typically, companies go to nj during the final parts of business. business.f theonn has definitely set pattern. emily: thank you so much for the update. we'll continue to follow the story . ♪ turning to cyber security, symantec, coming in with a beat on quarterly sales.
private equities from silver lake is putting in $500 million. -- appointed to the board. ceo george kurtz is here to tell us all about the biggest issues we should be paying attention to. what is the nation of the nation state actors? has escalated more than a year ago? kurtz: we have really looked at the g a political landscape and see how this impacts -- geopolitical landscape and have seen how this impacts it. china is trying to figure out how to take care of the
population by learning the tricks and trades of the companies in the u.s. what strikes me as the range of threats that you are highlighting in your new report. the number of new things that can go wrong here seem to be increasing by the day. these are countries where there are real specialists emerging in doing real bad things. how scared should the average company be? mr. kurtz: we are reaching the point where boards of directors have a plan for cyber security. we have 13 industries that are being targeted and a five-year to build ahina profile of what industries will be targeted and what technologies and areas available focused on for a cyber attacker perspective. recently speaking to the ceo of a cyber security
firm about the reality of how companies understand what threats there are. take a listen. >> basic hygiene. people always want to worry about ninjas coming through the skylights. but many customers have the front door open and the windows unlocked. this encryption isn't present. you don't need to worry about russia, you need to worry about a 12-year-old script kid who has access to google. are realizing, most of their attacks do not come from agencies, but smith -- but people who are not that sophisticated who are exploiting holes that have been left open because the tools are broken. mr. kurtz: this has to be broken down to people, processing, and technology. this is not just a technology problem.
add intelligence to the overall equation. when we put this report together, and we work with a lot of multinational customers, they are dealing with these threats. they are dealing with more than just the 13-year-old script kids. these are nationstates, cybercrime, sophisticated actors. adding intelligence to the people process and technology mantra is critical to why we put the report out. this is interesting. but as the security industry like a boom in the street? should viewers be crazily buying security? [laughter] emily: those stocks are actually down further than the average. the nasdaq cyber security index downown 13% today -- here 13% year-to-date. well, you have to
look at these companies, who have technologies which from a network perspective don't always solve the problem. there are companies like us, up and comers who are dealing with the most advanced threats as opposed to network play. placerket is a fantastic to be, and like anything else, it ebbs and flows depending on how the overall market reacts. emily: thank you so much for stopping by. ♪ emily: on this day in tech. 2 --ars ago today, march mark zuckerberg launched face book. than anittle more online directory, helping harvard classmates connect, he dropped the "the" and went global. 1.5 billion i
people worldwide. it has made mark zuckerberg the second youngest billionaire in the world. speaking of facebook, in honor of the anniversary, the kind company -- the company crunched and found that every person in the world is connected to every other person by an average of 3.57 people. that is at least among the 1.5 9 billion people active. billion people active on the site. david, you wrote "the facebook effect." david: i continue to be in all of the company-- be awed by this company. zuckerberg himself did not know how big it would be.
he thought he was doing something for his classmates. he has been amazingly opportunistic, seeing opportunities, and his whole idea is to connect whole planet. emily: the followed him for long time when you wrote your book. he made the decision not to sell to yahoo!, several decisions where he way demonstrated conviction that this could be something much bigger than what it was. david: you and i were talking about sean parker, who gave him the idea about how big it could be, more than any other person. napster. cofounded david: he is per trade as a druggie, and out of control person. emily: justin timberlake. but he was interested in scale in a way that zuckerberg and often. reallyow what is cool? a billion dollars."
he says the ceo of uber is one out andt-- is wimping needs to give investors their money back. venture capitalists are putting pressure on entrepreneurs to show profitability overgrowth. bloomnet is just one of the latest victims of corporate restructuring could i'm joined by ellen hewitt -- restructuring . i'm joined by alan hewitt. maybe the company is being too good to its customers? of crazy pet,nd when our flowers for $35-- pro $35. one hour flowers for they were growing quickly.
they saw thatnt, they had three months of money left and were burning $600,000 per month and had to lay off 40% of the staff. they were not making ends meet. they were trying to get enough customers without making the economics pencil out. charlie is emily: is this a story or hearing again and again? ellen: yes, these startups where people have to transport real goods from door-to-door. they hope to make the delivery fees small, but have to do low profit margins could for a while, -- margins. ok, but nowthat was investors are starting to ask before they pick up the checkbook. "how are you going to get a
profitability?" how are you going to support business? emily: these startups are struggling, trying to change their business models. to 2.5 billion dollars, the valuation is 62.5cedented-- uber is at billion dollars, the valuation is unprecedented, and they are being asked to go public now. david: this reminds me of cosmo, a company in the first level, dollarou can get a one candy bar delivered to your house for free. this is a back to the future moment. these apps were getting funded until a couple of months ago. i was sitting with princeton students who came to new york and were doing a tour and
invited me to talk. we're going through a list of the top startups, and they were so appalled, saying that is a bunch of services for upper-middle-class people who already have everything they need. we have seen too much of that. these are not kind of-- not the kind of growth businesses we need. at least uber could be a massive transformative force could all these delivery companies -- force. all of these delivery companies, amazon will compete with everyone of them. i wouldn't want to compete with amazon. emily: are investors changing their tune? ellen: yes, all of these people they are talking to, they are all saying the same thing. sexy toonomics weren't or three years ago when these companies started up. that's not the case anymore.
we have seen people talk again and again, the negative growth margins are not acceptable. this does not carry the same believability. to see you making money, selling something for more than it costs to produce it and deliver it, which has always been the case. thank youen hewitt, so much. david kirkpatrick, sticking with me. up next, we look at the tech ro le in superbowl 50. who is winning and losing as silicon valley is put in the spotlight? ♪
to play. table bring in innovative applications to make sunday's game this techiest in superbowl history. it is an american tradition worth millions in brand equity alone. as the world turns into superbowl 50, a new player is getting more attention than ever, technology. this starts with an all-star team of tech mvps. >> apple was an early partner. , and on and on and on. emily: keith bruce is ahead of the host committee and is credited with rallying tech's biggest names to win the bid for super bowl in silicon valley. keith: this is the time to join them and be on the world stage. that's why we said we want to be a part of it.
the pride has cost the bay area nearly $1.3 billion to build a high-tech stadium complete with its own app. >> it literally delivers food and beverage to all the people in the building within six minutes. emily: fans can enjoy custom entertainment in real-time. >> we have a wi-fi box under everyone hundred seats in this building. there are 700 wi-fi boxes coming out of the concrete. gigs,l mandate is only 10 and we have 40. there are 7000 football fields of fiber optics. another super bowl first, a tech-centric half-time show in the dark. >> you should probably expect that the lights go down and some interesting things come out. emily: rumor has it that the
stadium is working with the latest crowd connection software for in illuminating performance. >> you need a certain standard of technology to deliver that interactivity, and that is what levi's is stadium offers. it has an unbelievable capability that most idioms don't have. emily: joining me to dig even deeper into how the bay area is handling super bowl insanity, francisco,er in san where a million visitors are expected in addition to the 70,000 lucky enough to get tickets. the huge influx has put on demand businesses like uber, airbnb to the test on their home turf. it's not going so well. what happening? -- what's happening? lyft have just
cut prices, and there is frustration from the drivers. the anger from the drivers is clouding the positive message around the super bowl. emily: uber dropped prices, and hosts aren'tbnb happy with how much they are making. eric: there's a bit of a price war going on. lyft hasd first and to stay competitive on price. it is a race to the bottom, and there's so side, many hosts. people go to offer their apartments for the super bowl, prices, they want to hire one to make more money, but for people staying here, it is good. do you think people will
take away a fundamental he different point of view about silicon valley as a result, or is this a little bit of talk about companies that are trying to keep their image fairly prominent in the media? i think that people, we take a lot of it for granted in san francisco. lyft, these products will be super helpful for those of us try to get around silicon valley. visitors being introduced to the products, that will be a good look for the company. there's an idea that visitors who see them at their best, that is good. on the other hand, there are these angry drivers, certainly not a good look for the company. people will see that and think about whether they should be taking an uber. emily: i'm sure you've seen the tweet about uber not going public, "just do it." what do you think?
comparedr's ceo themselves to an eighth grader. bowling which he is using around language he is using around the ipo is tough saysng but the ceo of uber this is not something they are thinking about anytime soon. they could get a bunch of money from private investors and face less scrutiny. why go public? fred can say that, i don't think he is a major uber investor at all. it's easy to say that. keep throwing money at them on the private markets, so i think travis is happy to shrug your shoulders and say, "why go public?" emily: i always appreciate fred wilson giving us something fun to talk about. thank you for being here. eric: i love being here. emily: it's so great to have you as always. and now, time to find out who is
having the best day ever. the winner? martin shkreli, the former during pharmaceutical ceo faced lawmakers at a hearing under price increases and surprised no one by pleading the fifth. he didn't hold back on twitter, exerting his right to free speech. "it is hard to accept that these imbeciles represent the people in our government." he claimed he was counseled on facial expressions ahead of the testimony, but faced on the footage, we are seeing some actions speak louder than words. [laughter] emily: that does it for this edition of bloomberg west. i will be speaking to alex roth and will be anchoring bloomberg as well. ♪
♪ >> from our studios in new york city, this is charlie rose. evening we begin this with president obama's address of the islamic society of baltimore. it was the president's first visit to an american mosque as president in one of several planned speeches on religious tolerance. he will appear at the national prayer breakfast on thursday. theis speech today, president condemned islamophobia and defended religious freedom. pres. obama: we have to stay true to our core values, and that includes freedom of religion to all faith. founders, that our